The year 2019 commenced with a steady continuation of several large industrial projects along the corridor spanning from Hagerstown to Winchester. On the northern end of the corridor in Washington County, MD, construction continued on Trammell Crow’s 1.2 million square foot speculative development project as well as Bowman Development’s 504,000 square foot expansion to their Newgate project off Hopewell Road in Hagerstown which saw 163,000 square feet deliver this quarter and 341,000 sf the previous quarter.

Further south in the eastern panhandle of West Virginia, Equus Capital Partners delivered their 356,000 square foot facility at 261 Development Drive, the majority of which is committed to Procter & Gamble, and plans on breaking ground on a second building within the next few months. In neighboring Jefferson County, WV, walls are going up at Roxul’s controversial insulation manufacturing plant which will see 460,000 sf deliver in Ranson later this year. Further south still in Winchester, VA, the FBI continues work on their 256,000 sf Central Records Complex on the east side of Frederick County while Johnson Development is in the beginning stages of constructing a 324,000 build-to-suit warehouse for Mercury Paper in Winchester’s Fort Collier Industrial Park. All told, by the end of Q1 a 2.2 million square feet was under construction.

Although much of the speculative construction currently underway has not been pre-committed, the first quarter also saw robust absorption of a total of 958,345 sf. Much of this was Procter & Gamble occupying a total of 882,000 square feet of which 182,000 was leased from Equus Capital Partners and the remainder constructed on P&G’s mega campus in Martinsburg. Rental rates continue to increase modestly with an overall rental rate of $4.16 NNN although Class A space is being marketed for no less than $4.50 NNN. .